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What It Takes...

MCM — 2010-03-09T15:54:16-06:00

Last month at the annual Stadium Managers Association Seminar in Orlando I was privileged to moderate a panel comprised of four of the leading individuals in sports facility design and construction: Earl Santee and Scott Radicec of Populous, and John Wood and Ken Sorenson of Mortenson Construction. The title of the session was “Construction: The First Thing We Do, Let’s Kill All The Lawyers” (thank you Shakespeare) and, as the title implies, was directed at project-level strategies for avoiding serious disputes. The two firms had recently collaborated in building a new ballpark for the MLB’s Minnesota Twins (Target Field) and a Div. 1 football facility for the Minnesota Gophers (TCF Bank Stadium). Although both buildings experienced issues, they were great examples of how to overcome them within the project team. The panelists agreed upon a number of factors that were behind these successful projects, but the four most prominent were: • Resolution of issues at the lowest levels. • Early collaboration sessions. • Frequent communication, especially among principals for all parties. • Timely change management. Of these four, field level solutions was deemed by far the most crucial to the avoidance of serious disputes and the delivery of successful and less stressful projects. It follows that implementing the means to that end results in a high return on investment, both quantitatively and qualitatively.

London 2012 Olympic Venues get proactive in avoiding disputes

MCM — 2008-04-25T13:37:37-05:00

An independent dispute avoidance panel (IDAP) has been set up to help avoid contractual disputes during construction of the venues and infrastructure for the London 2012 Olympic and Paralympic Games. The U.K.'s statutory "Adjudication" system is in many ways superior to some of the resolution strategies used here in the U.S., and here it is being complimented by what appears to be a neutral evaluation process on steroids...in a good way.

Water district halts work on Everglades reservoir.

MCM — 2008-05-19T13:15:16-05:00

The governing body of the world’s largest reservoir construction project has put it on hold, ostensibly because of a pending lawsuit by an environmental watchdog group. The South Florida Water Management District has decided that it is no longer willing to bear the risk of legal uncertainties, however the Natural Resources Defense Council claims that the agency is simply playing politics and, in effect, holding the project hostage to its position. Of course we have only news reports upon which to base any thoughts or opinions, but this is what caught our eye: Assuming that both sides are acting with the best of intentions, their ultimate goals are relatively similar, ie. save the Everglades. And yet, over the last two years the project cost has almost doubled to $800 million, this upcoming suspension will add another $1.9 million per month in contractor fees, and any significant delay will only escalate the cost of goods and services further. This is all without regard to what has to be very expensive litigation. No doubt that this controversy involves complex issues, but (a) when were they identified, (b) when could they have been identified, and (c) given the similarity of interests and the enormous additional costs, were they given enough attention early in the process? All too often, social, political and business agendas control the early activities of a project to the point where meaningful dialogue on some of the important components gets lost. Maybe this situation was not that simple...and maybe it was.

Don't Lose Sight of the Big Picture

MCM — 2008-05-22T13:12:12-05:00

The Washington Post reports that the Nationals are seeking damages of $100,000 per day because the new ballpark was not ‘completed’ on time. It seems that the team offices and some other areas were not ready for occupancy by Opening Day, never mind that the game was played as scheduled and ‘expectations have actually been surpassed’ according to team owner Ted Lerner. A quick look at the construction and lease documents actually supports the Nats’ position, however questions involving substantial completion, delay, and the appropriate measure of damages can get extremely complicated. For example, despite contract language or architectural certification, if a project is in reality capable of being used for its intended purpose an argument can be made that ‘substantial completion’ has been achieved in fact. More importantly, as the Post article suggests, in these early stages of a relationship among the fans, team and city it may be penny-wise and pound-foolish to pursue what may be perceived as windfall damages when the breach and inconvenience may only be slight. The same can be said for many construction issues, and the importance of good relationships and an eye on the bigger pictures cannot be overestimated.

The 1,000 Foot View...Literally

MCM — 2008-06-03T13:09:28-05:00

As time goes on we’ll be taking a look at the different ways that technology can help us to track, document, communicate, and organize construction projects. However, as sophisticated as some of these tools and techniques are, we sometimes may overlook the good-old-fashioned ways. Take for example the use of aerial photography. It may not be the most obvious or economical tool, but there are at least three good reasons for using it in construction. (1) It can disclose the existence or non-existence of conditions central to resolving an issue that ground-based observations may not detect; (2) it can be used to help verify contract compliance by contractors and vendors that might be missed otherwise; and (3) it can provide an excellent, site-wide, visual progress history of value to the immediate project team as well as remote stakeholders. Again, this technique is not for everyone, but it is particularly useful and cost-effective on large budget and/or large-site projects such as sports facilities and expansive commercial developments.

Know Your Sports Architect

MCM — 2008-06-19T13:04:41-05:00

One consequence of the stadium building boom of the past 20 years has been the rise of sports facility specialists ranging from cupholder vendors to multi-million dollar video system manufacturers…and everything in between. There is probably not a single stadium-specific component that does not enjoy the niche-focus of some individual or firm. We like to think, and are pretty sure it’s true, that it all started here in Kansas City when the architects of the Truman Sports Complex (Arrowhead & Kauffman Stadiums) morphed into HOK Sport which later begat, directly or indirectly, the sports facility practices of 360 Architects, HNTB, and Ellerbe Beckett. There has been even more begatting as members of those firms have relocated to other cities, but the vast majority of sports facility architecture still emanates from KC. So, we read with empathy the plight of the Dickinson Independent School District, which has filed suit against the initial architects of its high school stadium for designing a structure whose low bid came in $6 million higher than the $10 million budget, despite explicit instructions. Like all lawsuits there are two sides and many factors, but as specialized as this industry has become, it seems that both the District and the designers would have been well-served by seeking experienced input or evaluation. As it is, the District has to pay for a redesign and increased costs of construction, and the architects will suffer the slings of lawyers and public criticism. Nobody wins.

N(SF)IMBY: Not (a Sports Facility) In My Backyard!

MCM — 2008-06-25T12:53:32-05:00

As we all know, sports facilities draw neighborhood interest, support and, as often as not, strong opposition. The proposed site(s) of a new stadium is almost guaranteed to be the first battleground of local, political and special interests. A few of the more recent combatants involve: • New Jersey Nets -- the Atlantic Yards project in Brooklyn was challenged over its use of eminent domain all the way to the U.S. Supreme Court (challenge denied by the Court on 6/23/08). • San Francisco 49ers -- a year and a half struggle among the city of Santa Clara, the team, and Cedar Fair, owners of Great America theme park, over building a new football stadium on parking lots leased to Great America. • Charlotte Knights minor league baseball -- the proposed site is being challenged in court by a citizen/lawyer who claims that the property’s only permitted use is as a park. • Florida Marlins – a citizen lawsuit is headed to trial on July 1 challenging the TIF funding strategy being used to build a new ballpark without a public referendum. • UC Berkeley -- Lawsuit by the City of Berkeley, a neighborhood group, and environmentally concerned “tree-sitters” challenging construction of an athletic training center because it is in close proximity to an earthquake fault line, it will cause traffic and noise problems, and it will eradicate a large grove of 80-year old trees. For better or worse, these site-related issues, and the concerned parties, don’t necessarily go away when construction begins. For example, a couple of months ago in Carson Harbor Village, Ltd. v. Bd. of Trustees of Cal. State University, the California Court of Appeals dealt in part with the complaint of nearby residents concerning spillover lighting at the Home Depot Center, a sports complex and soccer stadium inhabited by the Los Angeles Galaxy of Major League Soccer. During construction, it was decided that a more extensive and intrusive lighting scheme would be implemented instead of that which was originally planned and approved in the Environmental Impact Report. What followed was roughly 6 years of agency hearings, supplemental reports, litigation and appeal, not to mention significant time, expense, and aggravation on all sides. It’s important to keep in mind that, when it comes to high profile and busy facilities, site selection criteria bears little resemblance to “location, location, location”. Many other issues need to be identified and addressed on an ongoing basis, lest they stick around for years.

Foul Ball Standards Not Fair?

MCM — 2008-08-04T12:45:58-05:00

Over the past few years, at least a dozen states have determined that the owners and operators of baseball stadiums must take certain steps to protect their patrons from foul ball injuries. This “limited duty” rule essentially requires (1) that the stadium owner/operator provide adequate protection for the most dangerous areas, and (2) patrons be given ample notice and access to protected seating if desired. Trouble is, different jurisdictions are beginning to have different interpretations of the same “limited duty”. For example, one of the first cases to adopt the rule was New Jersey’s Maisonave v. Newark Bears, which held that while the stadium operator’s duty is limited, that limitation applies only to the seating bowl—and not, as was the case, to a concourse/concessions area. In those areas the stadium owes the same duty as it would a “business invitee”—thus the Court’s finding of stadium liability. However, just recently the state of Nevada, in Turner v. Mandalay Sports, held that the limitation on liability extended throughout the “confines of the stadium”. Therefore, the stadium was not liable to a plaintiff who, similar to Maisonave, was eating in “the Beer Garden, a concessions area located several hundred feet from home plate on the top viewing level of Cashman Field”. Conflict of laws is not new…it’s part of law school curricula…but in this case it means that owners, designers, contractors, teams, and leagues have to deal with multiple varying standards of “dangerous” areas, adequate “protection” for those areas, and the operational difficulties of providing availability and access to “safe” seating. The potential impacts on design, construction, and operation…not to mention fan experience…are significant. The circumstances would seem to be ripening for unified efforts and/or model legislation.

The Cost of Conflict

MCM — 2008-04-20T15:10:58-05:00

Excerpt from the Stadium Managers Association's March, 2008, newsletter, by Mike McCormick: We all know that conflict can get expensive, but up until a couple of years ago no one had tried to quantify the procedural cost of resolving construction disputes. In other words, how much is spent on the process alone, without regard to a dispute’s inherent impact on project cost, schedule, quality, etc. Enter the Construction Industry Institute (CII) , a University of Texas think-tank whose sponsoring membership includes many of the largest builders and owners in the world (including our own Anheuser-Busch and M.A. Mortenson). In 2005, the CII released a statistically significant study of the “transactional cost” of resolving disputes in 46 large commercial projects. The findings are both sobering and encouraging: • The bad news math is that, when it is necessary to resolve a dispute outside of the immediate project environment, by mediation, arbitration or litigation, the median average cost of that process is 2% of the total project cost. Worse yet, the mean average cost is a staggering 15%. Industry-wide, as much as $11 billion per year is spent processing claims outside of the project. • Conversely, when a more proactive approach is taken and issues are aggressively dealt with at the “lowest level possible” the savings in “money, time and...aggravation” are significant. The study highlighted the savings achieved by negotiation, project neutrals and low-level mediation, but keeping issues as close to field level as possible is also part of the logic behind the concepts of partnering, integrated project delivery, alliancing, and the like. Lesson—Intuitively we know that proactively avoiding problems and fixing them early is good, but now we have an idea of just how expensive the flip side can be.